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Pakistan’s Army chief General Qamar Javed Bajwa has reached out to the US for the early disbursal of the nearly USD 1.2 billion loan from the IMF, a media report said on Friday, as the cash-strapped country grapples with dwindling foreign exchange reserves.
Bajwa called US Deputy Secretary of State Wendy Sherman earlier this week and reached out to the White House and the US Treasury Department to push the international lender to expedite the early release of the nearly USD 1.2 billion loan, Nikkei Asia reported.
Bajwa’s initiative came after meetings between senior civilian Pakistani and American officials failed to make progress on the negotiations for an early disbursement of IMF funds, it said.
The lack of progress in those meetings spurred Gen. Bajwa to get Washington’s attention when other emissaries could not deliver, the report quoted unnamed sources as saying.
Earlier this month, the IMF said Pakistan was at a challenging economic juncture, after it reached a preliminary Staff-Level Agreement on the combined seventh and eighth reviews for a USD 6 billion loan facility for the country.
The agreement paves the way for the release of the much-awaited USD 1.17 billion loan tranche that had been on hold since earlier this year.
The deal materialised after Pakistan met the IMF’s demand that the country achieve a primary budget surplus of PKR 152 billion to revive the bailout package, according to the Dawn newspaper.
Three years ago, the Pakistan government under Prime Minister Imran Khan had inked a 39-month USD 6 billion programme with the IMF.
Out of this, barely 50 per cent of the amount has been disbursed so far as the country repeatedly failed to meet its targets. The IMF programme was put on hold following Khan’s ouster in April.
Higher prices of energy imports have put Pakistan on the brink of a major balance of payment crisis.
Pakistan’s foreign exchange reserves continued to plummet sharply due to external debt and other payments.
According to the central bank, State Bank of Pakistan’s estimates, Pakistan’s foreign exchange has fallen below USD 9 billion as on July 22, while the current account deficit widened to touch USD 2.3 billion for the month of June.
Meanwhile, the Pakistani rupee continued its downward slide against the US dollar, closing at a record-low at 239.94 against the greenback in the intra-bank market on Thursday.
The restrictions on the import of completely built-up automobiles has led to the country’s two leading car assemblers — Toyota and Suzuki — to plan partial shutdowns due to the severe paucity of raw materials.
New York-based ratings agency S&P Global on Friday revised Pakistan’s long-term ratings from ‘stable’ to ‘negative’ due to higher commodity prices and tighter global financial conditions.
Finance Minister Ismail Miftah has assured that the country would not default after subsidies on petroleum products imposed by the erstwhile Khan government were abolished.
